October 18, 2012 - MLI's latest study, Provincial Solvency and Federal Obligations, by author Marc Joffe, is in the Financial Post, The Globe and Mail, CBC News, Wall Street Journal, and Toronto Sun. It is also being talked about on radio and television shows across the country!

The study concludes that the threshold for a provincial default is an interest to revenue ratio of 25%. With current low interest rates, none of the provinces appear to be at risk of reaching this level in the near term. At the longer end of the spectrum, defaults become much more likely.

Ontario would be the most vulnerable. The study calculates the province's default probability would reach 42.9% over 20 years and 79.3% for 30 years. Alberta's default probability would rise to 42.4% and 84.0%, respectively. Quebec's default probability, meanwhile, would be 8.1% and 28.2%, respectively.